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One result of the Imperial Conference on Postal Rates held in London, in addition to the inauguration of Imperial Penny Postage, was to revive the agitation for the reduction of the domestic rate on postage in Canada from 3c to 2c on letters weighing one ounce or less. Indeed just prior to this Convention a bill in amendment of the Post Office Act had been assented to by Parliament under which it was agreed the reduced rate of postage should prevail, but no immediate steps were taken to enforce the reduction, it being left to the Governor General to name a date when the change should take effect. The establishment of Imperial Penny Postage, however, brought matters to a head, for it was a ridiculous state of affairs under which a charge of 3c had to be levied in carrying a letter from one town to another in Canada while 2c would carry a similar letter (if under half an ounce in weight) to any point in the British Isles. Consequently the Governor General named New Year's Day as the date when the reduced rate of domestic postage should come into force as shown by the following “Order in Council”:—

The immediate effect of this change of rates was a vast increase in the demand for 2c stamps and a corresponding decrease in the use of the 3c. Also, to fall in line with Postal Union requirements a change of color was necessary, but this did not take place at once, the postal authorities preferring to follow their usual precedent of using up the old stamps first.

The 3c, which had been printed in large quantities, moved so slowly that the Post-Office Department decided that the only way the stock could be used up within a reasonable time would be to reduce the stamps to the value of 2c by means of a surcharge. This intention, as well as a change in the color of the regular 2c stamps, was set forth in a circular issued on July 1st, 1899, from which we extract the following:—

The official estimate of the time the then existing stock of 2c purple stamps would last was not far wrong for on July 20th the first of the surcharged labels were issued. The surcharge follows a somewhat peculiar arrangement the numeral “2” and “S” of CENTS being larger than the rest of the inscription, which is flat at the bottom and concave at the top. This distinctive type is said to have been adopted to make counterfeiting difficult, though it is hardly likely anyone would have reduced a 3c stamp to the value of 2c with the idea of defrauding the Government! Evidently the inscription was specially engraved and from it a plate was constructed so that a sheet of one hundred stamps could be overprinted at one operation. Some little variation will be found in the thickness of the type of the surcharge though whether this is due to the use of more than one plate or simply to overinking or wear is a doubtful matter. The normal position of the surcharge is horizontally across the bottom of the stamps but owing to poor register it is sometimes found much out of position, and specimens with the overprint across the centre of the labels have been recorded.

The surcharge was, at first, applied only to the 3c stamps of the numeral type but it was soon decided to also use up the unissued remainders of the 3c “maple-leaf” design by surcharging them in the same manner. These stamps were first issued on August 8th. Both varieties are known with inverted surcharge. How many of each of these three cent stamps were surcharged is not known for certain as the official figures dealing with the issue of stamps makes no distinction between the two varieties. It is stated that altogether 4,120,000 were surcharged and as the varieties are equally plentiful it is only reasonable to suppose that approximately equal numbers of both types were used up.